VIDEO: As Iran Deadline Nears, Watch This Key Level for the S&P 500

2026-04-07 Video (10:46)

In today’s video, Chris explains how the Pro Portfolio is approaching President Trump’s 8 PM ET deadline tonight for a deal with Iran.

We also discuss what we’re looking for in today’s weekly Employment Change report from ADP, and why we’re not as focused on the February Durable Orders data.

Chris also shares what we’re looking to learn when Levi Strauss (LEVI) reports after today’s market close and from Delta Air Lines (DAL) and Applied Digital (APLD) on Wednesday (Hint: one of them indirectly touches two of the Portfolio’s holdings).

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At the time of publication, TheStreet Pro Portfolio was long NVDA and SSSS.

Transcript

CHRIS VERSACE: Hey, everybody Chris Versace. It is Tuesday, April 7th. And like many others, me, you, all of us, we are waiting to see what happens later today between the US and Iran, whether a deal is struck before President Trump's imposed 8:00 PM Eastern deadline this evening. As we know, yesterday Trump made some comments about a deal, including potentially the reopening of the strait. He even hinted that the US could be a entity that collects tolls for passage through the strait. We'll have to see what happens. We'll leave it at that.

Once again, we find ourselves saying that details and follow-through matter, and that means we'll be paying close attention to any deal that is struck, or the fallout if one isn't. As you can imagine, by this time tomorrow, we should have a lot more clarity on the issue. Hopefully, that is indeed the case. And based on what we learned, if we need to make any adjustments with the portfolio, we'll be angling to do that.

Now, between now and then, however, we do have a couple of pieces of economic data out in the next day or so, as well as some earnings out later today and tomorrow that we want to preview with you what our thinking is. So the economic data ADP's weekly employment change report and durable orders for February. Between the two, we are probably likely more going to focus on ADP's weekly jobs figures for the simple reason. And we talked about it yesterday on our alerts with you, but it bears repeating.

The real disconnect that we saw between the March employment report that surprised to the upside, but then the sharp fall in ISM's service PMI for March and the employment line item, which fell to one of the lowest levels we've seen, not really in months, but in some time. And as I wrote in the alert to you, we do expect revisions when we get the next iteration of the employment report for April. The question is magnitude.

And I think we're going to focus very, very closely on other jobs data that we get over the next couple of weeks to really try and figure out how big those might be, and what that might mean for the trailing three-month number, which was, if memory serves, in the mid 60,000. Not exactly a robust number, but again, not one that is likely to see the Fed helicopter in and do anything, given what we saw on the inflation front. So we will be focusing on that.

And candidly, the durable order number, we will look it over. But remember that this is a figure for the month of February. So before the conflict started. More on our mind is trying to piece together whether or not some of the upticks that we've seen in the March data so far is reflecting true demand, or perhaps some pull forward in demand, given the escalation that we saw on the US-Iran conflict, raising uncertainties, of course, in that questions over potential supply chain disruptions.

Now, on the earnings front today after the close, we do have Levi Strauss, arguably consumer discretionary company. But it's one that we want to hear what they have to say about consumer spending, the use of potential sweeteners, rebates, discounts to bring customers in, input costs, pricing, challenges, and any pricing steps that they may need to take, given some input pricing pressure. Are they seeing any disruption in their supply chain?

Those sort of things help prepare us for the real brunt of the earnings season that begins next week with banks, and then a slew of others after that. But candidly, as much as we'll be paying attention to what Levi Strauss-- excuse me-- has to say, there are two other earnings reports out this week that will be much more interested in. The first will comes Wednesday morning from Delta Airlines. Obviously, we'll be trying to see what Delta has to say about the demand for air travel, given rising price pressures and other inflation points that are likely to pressure consumer spending all over again.

Are we starting to see any hints of demand destruction? What does Delta have to say about international travel or business travel, as well? But that's on the demand side. We also want to focus really in on the cost side, because we know where jet fuel has gone. As we've talked with you before, the real question for us now is, where does energy prices settle out, whether it's oil, gas, diesel, jet fuel, in the coming weeks and months? We'll be interested to hear what Delta has to say on that, but also, near-term steps that Delta is taking to limit the impact of higher jet fuel prices.

We've seen other companies, United, JetBlue, announce additional baggage fees. Will Delta follow suit? Will they have other additional price increases for things outside of bags? Or will they have a combination of those things and higher ticket prices? That's really what we're going to want to try and understand when we walk away from Delta's earnings call on Wednesday morning. And then after the close on Wednesday, we're going to hear from Applied Digital.

Now, this is a company that operates data centers, which if you know why they know the portfolio's holdings, then we're going to be interested in their comments about demand whether or not new buildings are being built or planned to be built. i.e., what are they saying on their own CapEx front? What are they saying about power and power limitations and how that might be crimping, bringing capacity on stream? What are they saying about other constraints in the supply chain? And what does that mean for expectations, given the large capital spending dollars that we have from the hyperscalers and others?

As background, though, for folks who may not be as familiar with Applied Digital, their core customer and very large customer is CoreWeave. And as we know, CoreWeave, well, that's a key customer for NVIDIA, and it's also a position in the SuRo Capital portfolio. So there's going to be a lot of takeaways for us when we finish listening to Applied Digital's earnings call, again, Wednesday after the close.

Now, we will also be listening as we move through the week for earnings preannouncements. Now, you know, or you should know that we continue to have concerns about consensus EPS numbers for the S&P 500 for the first half of the year. We've talked about it. We really laid it out late last week, but it bears repeating. Consensus numbers for the first half of the year and for 2026 are higher today than they were at the start of January, than they were at the end of February.

What does that mean? It means that the market is not really factoring in all of that we've really talked about during the month of March and the start of April about the impact, not only of the US-Iran conflict, the closure of the Strait of Hormuz, but subsequent pricing moves by companies as they start to feel the pinch of higher prices. And, of course, there's also the question about the closure of the Strait of Hormuz, the ships that are stacked up there, which are slowly starting to make their way through.

But odds are we're going to have some supply chain bottlenecks. So the market doesn't really seem to be taking all of that in for its expectations, certainly for the first half of the year. So with that in mind, even though there are other companies reporting that we may not be focusing on as much, we will still be interested in what they have to say about those forces. But we'll also be listening for any earnings preannouncements, good or bad.

And as we digest those, should they come around, we will be tying them back to the portfolio and its holdings as it makes sense. What we want to do is really make sure that we have properly refocused our expectations for what's ahead in the next couple of months, so we can be properly prepared. Others, they may not be doing that or thinking about that, but you know that we always try to think about what's coming in the next couple of days, the next few weeks. So we can think about not only how we should be positioning ourselves, but how the market might react.

So that's a little bit more of what we'll be doing as we move through this. We will also be watching the S&P 500's technical setup. We talked about this yesterday and kind of reaffirmed it again in yesterday's portfolio video with Julie Gillespie from TipRanks. But it's the 20-day moving average for the S&P 500 that we want to watch and to see if it pushes up to that level, if it's rejected, or if it pushes through, and then we get a positive test a few days later. So that's really what we're watching for on the technical front.

Tomorrow, we will have a fresh podcast. And in it, we are delving into the world of nuclear energy and uranium with our latest CEO guest. And I don't want to spoil it. All I'm going to say is that by the time you listen to the conversation, you'll be thinking about the intersection of not one, but two of our investment themes that we use for the Pro Portfolio. So you'll want to check that out, I'm sure, and we will have a lot more coming your way today.

So please, be sure to check your emails, your alerts. We know that we want you to get our latest thoughts. And if we happen to make any moves with the portfolio, although candidly, I don't envision any ahead of tonight's Trump-imposed deadline. But if we were to, we want to make sure that you are right there with us. Thanks for watching.